The effects of International Financial Reporting Standards on the notes of auditors

Purpose - This paper attempts to combine the developments in the accounting area with those in the auditing area. More specifically, it presents the effects of International Accounting Standards (IAS) on the auditor findings and report. Design/methodology/approach - International Standards on Auditing (ISA) are revised in order to be accepted by the European Union as the common and formal auditing standards of the member states. The introduction of IAS has been one of the most significant developments in the history of the financial statements preparation and presentation. The effects of the application of these standards are present both on the valuation of the firm and on the presentation of its "true and fair view". An extended analysis of the financial statements and the auditor reports is conducted. Findings - The effects of International Financial Reporting Standards (IFRS) on the auditor reports and notes, for the first two years of their formal application, are analyzed. It is realized that the auditor notes and the equity adjustments they propose are positively related to the notes that accompany financial statements before the application of IFRS, whereas they are negatively related to the explanatory notes imposed by IFRS. The different role of the company's notes before and after the application of IFRS and the relevant change of the auditor notes are further examined. Originality/value - Most of the research focuses on the accounting effects of IFRS. In this study, it is attempted to combine the developments in the accounting area with the developments in the auditing area. ISA are revised in order to be accepted by the European Union as the common and formal auditing standards of the member states. Much research is being developed in this area, although the data available are yet very limited. Most of the research focus is on the accounting effects of IFRS.